The right to file for bankruptcy protection is found in the United States Constitution, in our laws, and is one of the things that makes our country great. The ability to discharge debt is one of the things that encourages and allows the entrepreneurial spirit to thrive in the United States. A small business owner can take a risk, and if it doesn’t work out, we don’t send people to debtors’ prison, or hang the debt around their neck for the rest of their life.

There is a significant amount of misinformation and disinformation about people who file for bankruptcy. The notion that people intentionally run up credit card balances and then discharge the debt is just false. Rather, the majority of people who file bankruptcy are just regular people who are doing their best to work hard, pay their bills, and make ends meet. Often times, these people are just treading water when they are hit by an unforeseeable surprise such as illness, divorce, or unemployment.

Filing bankruptcy is not a moral decision. It is a financial one. Just like saving for retirement or making a household budget. In general terms, a useful way to consider whether bankruptcy is right for you is to make an honest assessment about what your debt will be two years from now. If you realistically believe you can pay off all of your debt within two years, that is a good option. On the other hand, if you are going to be just as far in debt (or more) as you are now two years from now, then bankruptcy may be the right option for you.

This is coupled with a still teetering housing market. Realtytrac reports that “a total of 97,123 U.S. properties received default notices in July, a 1 percent increase from the previous month but a 28 percent decrease from July 2009.” Realtytrac also noted that “Default notices in July were down 32 percent from their peak of 142,064 in April 2009.” Additionally, Realtytrac reported “Foreclosure auctions were scheduled for the first time on a total of 135,248 U.S. properties in July, an increase of 2 percent from the previous month but a decrease of 2 percent from July 2009. Scheduled auctions in July were down 14 percent from their peak of 158,105 in March 2010. Lenders foreclosed on 92,858 U.S. properties in July, a 9 percent increase from the previous month and a 6 percent increase from July 2009.”

This dire economic data has caused some to speculate that the economy is facing a “double dip” recession, that is, a second drop in economic growth, and the subsequent weakening in job growth and increase in unemployment. It seems likely that this second economic dip will force more families that are already hanging on by a thread so to speak into financial calamity. Many of these people will consider bankruptcy as an option. It should be noted that unemployment can significantly affect the type of bankruptcy that a consumer can file, and the overall outcome of that bankruptcy proceeding.

Chapter 7 liquidation is the most common type of bankruptcy. Since significant changes to the bankruptcy law went into effect, it has been more difficult to qualify for Chapter 7 bankruptcy. This is due to a provision of the bankruptcy code called “means testing.” This essentially looks at a household’s income and liabilities and determines whether the debtor falls below certain paramaters in order to qualify for Chapter 7 liquidation. On the other hand, many people seek Chapter 13 wage earner repayment plans. In order to qualify for this type of plan, the debtor must be employed, and demonstrate to the Court and Trustee that he or she can make the monthly payments under the plan. In between Chapter 13 repayment and Chapter 7 liquidation is a potential no-man’s land, in which the debtor previously earned too much income to qualify for a Chapter 7, but no longer qualifies for a Chapter 13 repayment plan due to unemployment. A good bankruptcy attorney can assist debtors in pre-petition planning to ensure that the proper type of case is filed. This may involve reviewing income, assets and liabilities also referred to as “means testing” or reconsidering the timing of filing a petition.

The Oregon consumer protection lawyers of the Consumer Litigation Group represent individuals in cases with false credit reports, identity theft cases, unlawful debt collection cases, and consumer fraud cases. The Portland Oregon bankruptcy attorneys, Oregon City bankruptcy attorneys, Hillsboro, Oregon bankruptcy attorneys, and Vancouver Washington bankruptcy lawyers of the Bankruptcy Practice Group represent individuals in Chapter 7 and Chapter 13 bankruptcy. Our mission of committed and zealous consumer advocacy is unrivaled, and our track record of excellence and professionalism is recognized nationwide.

For more information about bankruptcy in Oregon and Washington, click the links below:

• Chapter 7
• Chapter 13
• Common Myths about Filing for Bankruptcy in Oregon and Washington
• Frequently Asked Questions about Filing for Bankruptcy in Oregon and Washington
• Why Should You Hire a Bankruptcy Attorney?
• Eliminating Second Mortgages through Chapter 13 Bankruptcy
• The Process of Filing for Bankruptcy in Oregon and Washington
• Things to Avoid before Filing Bankruptcy
• Stopping Home Foreclosure through Bankruptcy
• Typical Filing Fees to File for Bankruptcy in Oregon and Washington
• Filing for Bankruptcy: A Fresh Start
• How to Dispute False Credit Reports after Bankruptcy

“We are a debt relief agency. We help people file for relief under the Bankruptcy Code.”

Under the Fair Credit Reporting Act, consumers have the right to dispute false information in their credit reports. Under ordinary circumstances, credit reporting agencies and creditors are required to conduct an investigation in response to such a dispute.

It is not necessary to pay anyone to write a dispute letter — you can do it yourself for free. Below is a short description of the process for disputing false information on your credit report.

1. Get a copy of your credit report. Under the Fair and Accurate Credit Transactions Act (FACTA), you are entitled to a free copy of your credit report each year. If you have been denied credit, you are also entitled to a free copy of your credit report.

While it is possible to access your credit report online, some credit reporting companies require consumers to give up important rights in order to access their credit report through their website. Also, it can be confusing navigating the many links to purchase services that you do not necessarily need. A better way is to request it by mail.

Consumers can request their free annual credit report by writing to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The request form is available at the annualcreditreport.com website.

2. Send a written dispute letter to the credit reporting agencies. Write a polite, professional letter detailing exactly what is incorrect and why. Be specific. Enclose documentation, such as police reports, correspondence with your creditors, and any additional information documentation you have. Tell the credit reporting agency if you are being prevented from obtaining credit, such as a mortgage, credit card, or auto loan, or if you are being harmed in other ways.

Send your letter via certified mail, with a return receipt requested. Keep a copy of your signed, dated letter, along with copies of enclosures.